POLITICAL ENVIRONMENT Mauraitania is currently led by Gen. Mohamed Ould Abdel Aziz, who overthrew President Abduallahi in August of 2008 in a military coup. Since then, there has been some question about the stability of the country’s political environment. Supporters of the previous president remain in a deadlock with supporters of the current ruler. There is a lingering conflict between the country’s ethnic groups - White Moor, Black Moor, and Black African Mauritanian. The government bureaucracy remains composed of ministries, special agencies, and parastatal companies. The Ministry of Interior controls a system of regional governors and prefects modeled on the French system of local administration. ECONOMICAL ENVIRONMENT Until democracy is restored in Mauritania, investment inflows will slow economic activity. Real GDP growth for 2009 is expected to slow to 2.5%, but will increase to 3% in 2010 with the rise of outside demand. The decline in oil and iron prices globally have resulted in lower fiscal revenue for Mauritania. However, local purchasing power has increased due to lower global food prices. Inflation is predicted to decrease to an average of 5% in 2009 due to lower food and oil prices globally. However, inflation may increase to 5.5% in 2010. The current account will remain in deficit and will increase to 13.5% of GDP in 2009. By 2010 the account deficit is expected to decrease to 13%. Price controls on food and fuel have been imposed by government. The government has reduced it’s budget spending by UM 37bn on these two items. The people of Mauritania are still largely dependent on agriculture and livestock. Mauritania’s location is ideal for fishing (and at one time fishing was a dominant industry), however its waters have now been overfished lessening the contribution of this industry. The country has significant deposits of Iron ore, which make up for almost half of its exports thereby contributing greatly to Mauritania’s economy.